How to Choose Long-Term Care Insurance

Medically Reviewed by Brunilda Nazario, MD on March 16, 2021
4 min read

Susana Zinn, a life insurance agent in Los Angeles, often gets requests for long-term care insurance after someone’s loved one gets sick.

“It's a wake-up call,” she says. “They see themselves reflected in that situation ... and start to worry that they won’t have enough money to pay for the extra expenses that health insurance doesn’t cover, like a caregiver or a nursing home.”

As many as 70% of people over the age of 65 will need long-term care at some point. The cost varies, based on the services you need, for how long, and where you live. But no matter the details, it can add up -- fast. The average cost of a home health aide is $54,912 each year. A private room in a nursing home? $105,850 for the same period of time.

Long-term care insurance can help cover some of your costs -- and also give you peace of mind.

Long-term care insurance is different from health insurance. It’s meant to help if you have a chronic illness or disability and need care for a long time. It can pay for:

  • Care you get in a nursing home or assisted living center
  • Nursing or other care in your home
  • Nursing or other care at an adult daycare center

Some types of long-term care insurance also pay for things like help around the house, respite care (which gives your caregiver a break), or hospice care.

Usual health insurance policies don’t cover these things. Medicare may only pay for a few.

There’s no “best” time to buy a policy, but people “tend to find the most success in their early to mid-fifties,” says Greg Klingler, a certified financial planner. He’s also director of wealth management at the Government Employees’ Benefit Association, which offers insurance options to federal employees and retirees.

But you can’t just pick a policy that meets your needs. First, you’ll need to apply and make sure you qualify. Your age and your health at the time you apply matter -- a lot. “If you wait too long, you run the risk of not being approved for coverage or being priced out of the level of coverage that you require,” Klingler says.

If you have a pre-existing condition, some companies may offer you a policy. But they could refuse to pay for some of the care you need as a result of it.

If you think you’d like to buy long-term care insurance:

Know how much you can afford.

The average yearly cost of a long-term care policy is $1,400 for a single 65-year-old man and $2,100 for a single 65-year-old woman in good health.

“[Long-term care insurance] is not like auto insurance, where you can change coverage every year,” says Bonnie Burns, a policy specialist with California Health Advocates, a nonprofit focused on Medicare advocacy and education. “You’re actually investing in future care. Once you have a policy and pay in for several years, you’re not likely to want to walk away from that money. You won’t get it back.”

Get expert advice.

Take your time and find an agent who specializes in long-term care. “There are many moving parts that can only be explored … by someone who knows what they’re doing,” Klingler says.

Compare your options.

Because there’s no one-size-fits-all policy, you’ll need to choose one that works best for you. For instance, if you have a good retirement plan or plenty socked away in savings, a smaller policy may be enough to meet your needs.

Compare several different options, including their benefits, the types of services and facilities they cover, what isn’t covered, and how much you’ll pay out of pocket. You can also ask your agent how much the rates of each policy go up each year.

And don’t forget to ask about ways that you can pay less. “Discounts for good health, being married, and purchasing policies together are common and can be substantial,” Klingler says.

Choosea company you trust.

“An insurance policy is effectively a piece of paper and a promise, so make sure the company ... you’re considering entering into an agreement with is financially strong,” Klingler says.

If you haven’t heard of a company before, ask your state’s insurance department to confirm they’re licensed to do business in your area. You can also check their insurer ratings online.

Involve a loved one.

Try to keep at least one loved one up to date, in case they need to help you get long-term care in the future. “They need to know what you’re buying and how it works,” Burns says. “The person who buys this type of insurance is often not the person who files the claim.”

Ask questions.

Along with your insurance agent, you can turn to your State Health Insurance Assistance Program (SHIP) with any questions.

Long-term care insurance is “a product you’re actually buying for the rest of your life, so it’s important that you get good information going in,” says Burns. “These are not cheap. That’s because care isn’t cheap either.”